More than 130 senior hotel and holiday park executives have written to the chancellor, Rachel Reeves, warning that Labour’s planned changes to business rates represent the most serious threat to the sector’s viability and must not be limited to pubs alone.
In a letter coordinated by UKHospitality, industry leaders said the government’s proposed relief package for pubs risks leaving large parts of hospitality “hung out to dry”, despite facing similarly sharp increases in costs.
Signatories include senior figures from Butlin’s, Hilton, Travelodge and Whitbread, alongside Haven, IHG Hotels & Resorts, Leonardo Hotels, Marriott International and Parkdean Resorts.
The intervention comes amid mounting criticism of Labour’s reforms to business rates, which executives say will drive closures, job losses and higher prices for consumers if left unaddressed.
According to analysis by UKHospitality, average hotel business rates bills are set to rise by 115 per cent over the next three years, adding around £205,200 per property. The sector is expected to be among the hardest hit by the changes due to rising rateable values and the withdrawal of pandemic-era reliefs.
In their letter, industry leaders warned it was “critical” that the government delivers a “whole-sector solution” rather than focusing narrowly on pubs, as ministers scramble to finalise a relief package expected to be announced in the coming days.
“These changes to business rates present the most significant challenge to accommodation providers in terms of their ongoing viability,” the letter said. “Many businesses will face tough decisions in terms of employment and their ability to invest.”
The executives added that hotels and holiday parks would not be able to “easily absorb” the additional costs, warning that higher prices would inevitably be passed on to consumers, exacerbating cost-of-living pressures.
“We therefore urge you to consider the accommodation sector when considering any support measures to address these crippling changes,” the letter concluded.
The warning follows outspoken criticism from industry leaders in recent weeks. Sir Rocco Forte said last week that the situation was “a mess of the government’s own making” and accused the Treasury of failing to understand the impact of its own policies.
Jo Boydell, chief executive of Travelodge, said: “Hotels cannot be hung out to dry on business rates.”
Simon Vincent, president of Hilton in Europe, the Middle East and Africa, said looming rate hikes, combined with higher employer national insurance contributions, energy costs and tourism taxes, were “impacting profitability and threatening jobs and growth, and it’s entirely avoidable”.
While pubs have staged high-profile protests, including banning Labour MPs from premises, hotel operators argue that the broader hospitality sector faces the same pressures, without the same political attention.
In the Budget, Reeves announced a reduction in the business rates “multiplier” used to calculate bills, but also confirmed that Covid-era discounts for retail, leisure and hospitality would be phased out. Combined with rising property valuations following the post-pandemic trading rebound, the net effect for many operators is sharply higher bills.
The controversy has been compounded by comments from Valuation Office Agency chief executive Jonathan Russell, who suggested ministers were aware ahead of the Budget that rateable values were set to rise — contradicting claims by Business Secretary Peter Kyle that the Treasury lacked access to the relevant data.
Hospitality leaders are now urging the chancellor to act swiftly, warning that failure to extend relief beyond pubs risks undermining investment, employment and growth across one of the UK’s most economically significant sectors.
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Hotel industry chiefs urge chancellor to extend business rates relief beyond pubs